The EU has banned imports of crude oil by sea from Russia and the insurance and financing of the transport of Russian oil to third countries, especially via sea routes. The EU ban took effect on December 5.
The EU, the G-7 group of industrialized countries and Australia agreed on a price cap for Russian oil at $60 a barrel which went into effect on the same day. In response to the price cap, Russian President Vladimir Putin signed a decree on December 27 banning the supply of crude oil and petroleum products to nations applying the Price-Cap, starting February 1 for five months.
The decision led to a 9% reduction in Russian crude oil exports by sea, falling well below 3 million barrels per day, the lowest level in 15 months.
India was the top importer of Russian crude oil in December at 1.3 million barrels per day, while China’s seaborne imports of crude oil from Russia remained flat. Together, they accounted for 82 percent of Russia’s daily seaborne crude oil exports.
An increase in sales of Russian crude to new Asian destinations in the first month of the price cap sees South Korea nearly doubling its November imports by 23,500 bpd. Japan, which has imported zero crude oil from Russia since June 2022, imported 22,600 barrels a day in December.
Italy, a major buyer of Russian crude shipped to Europe, cut its imports by 71% to 34,000 barrels a day in December from a month earlier.
The Netherlands did not import any seaborne crude oil from Russia last month while in November, seaborne crude oil imports were 102,835 barrels a day.
According to OilX, despite the sanctions, Russian crude oil exports held up very well into December. Then there was a drop in exports of around 400,000 a day.
According to some analysts, the EU ban on imports of crude oil from Russia and the price-cap will cost Russia 160 million euros ($171.7 million) a day.
As the EU ban on refined oil imports and the extension of price caps to refined petroleum products take effect by February 5, Russia is estimated to lose another €120 million a day.
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